Bitcoin (BTC) Price Watch: Downtrend Continuation or Reversal?

Bitcoin price continues to trend lower as it hit a roadblock at the top of its descending channel.

Price could be setting its sights back on the support from here and the Fib extension tool shows the next support zones.

Technical indicators also signal that a continuation of the selloff is likely in order.

Bitcoin price hit resistance at the top of its descending channel and a continuation of the downtrend could ensue from here.

Technical Indicators Signals

The 100 SMA is below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. The 100 SMA is also near the top of the descending channel to add to its strength as a ceiling in the event of another pop higher.

RSI is also on the move down so bitcoin price could follow suit until it hits oversold levels. Similarly stochastic is heading lower to also indicate that bearish pressure is present. This might be enough to take bitcoin to the next support zones marked by the Fibonacci extension tool.

The 38.2% extension is around the mid-channel area of interest at $6,250 while the 50% level is just close by at $6,125. The 61.8% level lines up with the $6,000 major psychological level while the 78.6% extension is closer to the channel support and longer-term lows at $5,800. The full extension is at $5,626.0.

BTCUSD Chart from TradingView

Bitcoin price made a bit of a bounce in the past 24 hours but this seemed to be a mere pullback from the slide that went on for the most part of the week. Although there have been a handful of positive developments, the current sentiment in the markets has made traders more sensitive to negative updates.

For one, the SEC announced its decision to delay the ruling on the SolidX/VanEck bitcoin ETF application to the end of September, right around the time it releases the decision on other applications it shelved.